The Dong Mo-Dai Kim social housing project in Hoang Mai district, Hanoi (Photo: VNA) HCM City (VNA) - People with low-incomes are now confronting a crisis as the preferential loan package of 30 trillion VND (1.3 billion USD) for affordable home purchases ended in 2016, with no workable alternative currently on offer.
In April 2017, the National Assembly Standing Committee granted the Vietnam Bank for Social Policies (VBSP) 2 trillion VND (88 million USD) to implement the housing assistance programme for those who have contributed to the revolutionary cause. However, both home seekers and enterprises were unable to access the preferential loans.
Hoang Nhat in Tan Binh district, HCM City, had to get a commercial loan with interest of 8 percent per year when he bought a social house in Binh Tan district. The bank will cover 2 percent of the interest for the first two years, but rates could rise after that.
Meanwhile, Nguyen Thi Lan in Binh Thanh district is still waiting for a preferential loan as she needs about 500 million VND (22,000 USD) to purchase a house.
“I would rather wait than take a commercial loan because its interest rate may rise too high,” she said.
Truong Anh Tuan, chairman of Hoang Quan Cooperation, said that the lack of preferential loan packages for social home purchases halted their 22 projects of constructing affordable homes. To raise market demand, enterprises have to offer clients interest rate subsidies.
A representative of Nam Long Investment Holding Company said that in 2018, only 500 billion VND (22 million USD) was funded for VBSP to support affordable home purchasers with low interest rates. Meanwhile, enterprises cannot enjoy the capital.
Dao Anh Tuan, head of the Student Credit Department under VBSP, said that the Governmental decree issued in 2015 assigned the bank to implement the social housing policy. However, as of 2017, there had been no capital allocated. Capital of 500 billion VND funded by the State Bank of Vietnam (SBV) this year is expected to be lended at the interest rate of 4.8 percent a year, according to Tuan.
Borrowers include those who have contributed to the revolutionary cause, poor and near-poor households, low-income workers and State employees.
On the other hand, Nguyen Quoc Hung, head of the Department of Credit under SBV, said that only 500 billion VND out of the preferential loan package of 2 trillion VND would be disbursed in the near future. The rest will be gradually paid out by 2020.
According to him, the previous package of 30 trillion VND has received 7 trillion VND (307 million USD) of repayment so far.
Nguyen Trong Ninh, head of the Department of Housing and Realty Market Management under the Ministry of Construction, suggested that the SBV fund commercial banks with the preferential capital for social housing as enterprises cannot access loans offered by SBV.
The only way to help enterprises address financial difficulties is to provide an interest subsidy on loans provided by credit institutions, he said.-VNA
VNA
